UPDATE 1-Argentine storms could cut projected corn crop 20 pct

By Hugh Bronstein BUENOS AIRES, Oct 30 (Reuters) - Argentina could lose 20percent of its projected corn crop and 10 percent of its soythis season as violent storms lash the Pampas, turning primefarmland into unplantable mush, a local expert said on Tuesday. Heavy rains since August have swamped Argentina, the world'sNo. 3 soybean exporter and No. 2 corn supplier. Topsoils havebeen flooded in the farm belt, which has just barely recoveredfrom a December-January drought that decimated 2011/12 crops. "Given all the hail, rain, waterlogging and flooding we'veseen, some corn fields will be lost. Others can still bereplanted, but with uncertain results," said Buenos Aires-basedeconomist and agricultural consultant Manuel Alvarado Ledesma. "You can expect a drop in corn production of about 20percent, to 22.4 million tonnes," he said. "There has also beena delay in planting soy, which at this point looks like it willreduce the harvest by 10 percent to 50 million tonnes." Consumer nations hope South American breadbaskets Argentinaand Brazil will produce enough grain to make up for some of theshortfall in Russia and the United States, where droughtsdecimated crops and pushed prices sky-high. The U.S. Department of Agriculture expects Argentina toharvest 55 million tonnes of soy and 28 million tonnes of cornin the 2012/13 crop year. Martin Fraguio, who heads local corn industry chamberMaizar, said up to 15 percent of Argentina's corn area might belost to the rains this year. Still, he said, 2012/13 output willbe above the 21 million tonnes produced last season. "Most of the corn belt has received, from September untiltoday, from 50 percent to 100 percent of the rain they would getin a normal year," Fraguio said. "We should have planted 50 to 70 percent by this point inthe season but we are only at 35 to 40 percent," he added. "ButI think it is still reasonable to expect 24 to 26 million tonnesof production, or even more." The flow of grains from Argentina is important to exporterssuch as Cargill, Bunge Ltd and Noble Group Ltd, which operate grains terminals along the ParanaRiver, leading to the shipping lanes of the South Atlantic.

Thin global food stocks have pushed Chicago soy futures 28 percent higher this year while corn has risen 14 percent. The most recent wave of excessive rains - lasting fromSunday afternoon to Monday night - was concentrated in keygrowing areas such as central and northern Buenos Airesprovince, southern Cordoba and Santa Fe. "Over the next week, until about Nov. 6, most of the farmbelt will get sunshine," said Ezequiel Marcuzzi, meteorologistat consultancy Clima Campo. "A large part of the Pampas is in a very complicatedsituation due to excess moisture," he said. "If weatherconditions don't get back to normal over the months ahead, thewindow will close and there will probably be crop losses." The Rosario grains exchange said 2012/13 soy plantingsshould rise 3.7 percent compared with last year as widespreadrains allow growers to seed in areas that are usually too dry. But, it warned, everything depends on the Pampas gettingenough sun over the weeks ahead to allow sowing to advance. "If there were a dry spell in the coming weeks, that wouldallow plantings to pick up the pace," the exchange said in areport. "But unfortunately this does not seem to be the mostlikely scenario in the short term."

SOARING WHEAT PRICES The flooding has also allowed fungus-based diseases toattack wheat crops already hobbled by scant planting. TheAgriculture Ministry says it expects Argentina's upcoming wheatharvest to shrink by 17 percent from last season, as farmersskirt export curbs by shifting to other crops. Chicago wheat prices have soared 31 percent since January. Argentine President Cristina Fernandez has riled farmers byincreasing the state's role in Latin America's third-biggesteconomy, clamping down on access to U.S. dollars and slappingexport quotas on wheat and corn. The country, robbed of competitiveness by one of the world'shighest inflation rates, has been shut out of the internationalcapital markets since its mammoth 2002 sovereign debt default. But with the United Nations projecting food demand willdouble by 2050 as the global population heads toward 9 billion,Argentina's farm sector is unlikely to fall off the map ofinternational investment funds looking for growth areas.